Target Hospitality Announces 5-year Contract Award Reactivating South Texas Assets
Target Hospitality (Nasdaq: TH) has secured a new five-year lease and services agreement with CoreCivic to reactivate its Dilley, Texas facility. The contract, running through March 2030, is expected to generate over $246 million in revenue, with approximately $30 million anticipated in 2025.
The Dilley Facility, previously operated as the South Texas Family Residential Center from 2014 to 2024, will maintain similar facility size and operational scope, supporting up to 2,400 individuals. The reactivation requires no capital investment and includes fixed minimum revenue regardless of occupancy.
The agreement is supported by an amended intergovernmental services agreement between the city of Dilley and U.S. Immigration and Customs Enforcement (ICE), subject to annual government appropriations with a 60-day cancellation notice option.
Target Hospitality (Nasdaq: TH) ha ottenuto un nuovo contratto di locazione e servizi della durata di cinque anni con CoreCivic per riattivare la sua struttura a Dilley, Texas. Il contratto, che scadrà a marzo 2030, dovrebbe generare oltre 246 milioni di dollari in entrate, con circa 30 milioni di dollari previsti nel 2025.
La struttura di Dilley, precedentemente operata come South Texas Family Residential Center dal 2014 al 2024, manterrà dimensioni e ambito operativo simili, supportando fino a 2.400 individui. La riattivazione non richiede investimenti in capitale e include un reddito minimo fisso indipendentemente dall'occupazione.
L'accordo è sostenuto da un accordo intergovernativo modificato tra la città di Dilley e l'Ufficio Immigrazione e Controllo Doganale degli Stati Uniti (ICE), soggetto ad approvazioni annuali del governo con un'opzione di cancellazione con preavviso di 60 giorni.
Target Hospitality (Nasdaq: TH) ha conseguido un nuevo contrato de arrendamiento y servicios por cinco años con CoreCivic para reactivar su instalación en Dilley, Texas. Se espera que el contrato, que se extiende hasta marzo de 2030, genere más de 246 millones de dólares en ingresos, con aproximadamente 30 millones de dólares anticipados para 2025.
La instalación de Dilley, que funcionó anteriormente como el Centro Residencial Familiar del Sur de Texas desde 2014 hasta 2024, mantendrá un tamaño y un alcance operativo similares, apoyando hasta 2,400 individuos. La reactivación no requiere inversión de capital e incluye ingresos mínimos fijos independientemente de la ocupación.
El acuerdo está respaldado por un acuerdo de servicios intergubernamentales modificado entre la ciudad de Dilley y el Servicio de Inmigración y Control de Aduanas de EE. UU. (ICE), sujeto a asignaciones gubernamentales anuales con una opción de cancelación con un aviso de 60 días.
타겟 호스피탈리티 (Nasdaq: TH)는 코어시빅과 함께 텍사스 딜리의 시설을 재활성화하기 위해 5년 간의 새로운 임대 및 서비스 계약을 체결했습니다. 이 계약은 2030년 3월까지 지속되며, 2억 4천6백만 달러 이상의 수익을 창출할 것으로 예상되며, 2025년에는 약 3천만 달러가 예상됩니다.
딜리 시설은 2014년부터 2024년까지 남부 텍사스 가족 주거 센터로 운영되었으며, 유사한 시설 규모와 운영 범위를 유지하여 최대 2,400명을 지원합니다. 재활성화에는 자본 투자가 필요하지 않으며, 점유율에 관계없이 고정 최소 수익이 포함됩니다.
이 계약은 딜리 시와 미국 이민세관단속국(ICE) 간의 수정된 정부 간 서비스 계약을 지원하며, 연간 정부 예산 승인에 따라 60일 전 취소 통지 옵션이 포함되어 있습니다.
Target Hospitality (Nasdaq: TH) a obtenu un nouveau contrat de location et de services de cinq ans avec CoreCivic pour réactiver son installation à Dilley, Texas. Le contrat, qui court jusqu'en mars 2030, devrait générer plus de 246 millions de dollars de revenus, avec environ 30 millions de dollars prévus en 2025.
La structure de Dilley, précédemment exploitée en tant que South Texas Family Residential Center de 2014 à 2024, maintiendra une taille et un champ d'opération similaires, soutenant jusqu'à 2 400 individus. La réactivation ne nécessite aucun investissement en capital et inclut un revenu minimum fixe, quel que soit le taux d'occupation.
L'accord est soutenu par un accord intergouvernemental modifié entre la ville de Dilley et le Service de l'immigration et des douanes des États-Unis (ICE), soumis à des crédits gouvernementaux annuels avec une option d'annulation de 60 jours.
Target Hospitality (Nasdaq: TH) hat einen neuen fünfjährigen Miet- und Dienstleistungsvertrag mit CoreCivic abgeschlossen, um seine Einrichtung in Dilley, Texas, wieder in Betrieb zu nehmen. Der Vertrag, der bis März 2030 läuft, wird voraussichtlich über 246 Millionen Dollar an Einnahmen generieren, wobei für 2025 etwa 30 Millionen Dollar erwartet werden.
Die Dilley-Einrichtung, die zuvor von 2014 bis 2024 als South Texas Family Residential Center betrieben wurde, wird eine ähnliche Größe und Betriebsumfang beibehalten und bis zu 2.400 Personen unterstützen. Die Wiederinbetriebnahme erfordert keine Kapitalinvestitionen und umfasst ein fixes Mindesteinkommen unabhängig von der Belegung.
Der Vertrag wird durch eine geänderte intergouvernementale Dienstleistungsvereinbarung zwischen der Stadt Dilley und dem U.S. Immigration and Customs Enforcement (ICE) unterstützt, die an jährliche staatliche Mittelzuweisungen gebunden ist und eine 60-tägige Kündigungsfrist enthält.
- 5-year contract worth $246+ million through 2030
- $30 million revenue expected in 2025
- No capital investment required for reactivation
- Fixed minimum revenue guarantee regardless of occupancy
- Contract subject to annual government appropriations
- 60-day cancellation clause poses potential revenue risk
Insights
Target Hospitality's new five-year contract with CoreCivic represents a significant financial win for the company. The
The financial structure is particularly attractive as it includes fixed minimum revenue guarantees regardless of occupancy levels, effectively reducing operational risk while maintaining predictable cash flows. The immediate
Most impressive is the company's asset utilization efficiency. By reactivating existing facilities that were idle since August 2024, Target demonstrates exceptional capital discipline—generating new revenue streams without incremental capex. This zero-capex reactivation should translate directly to higher operating margins and improved return on invested capital.
While government contracts typically carry appropriation and cancellation risks (the 60-day cancellation clause is standard but worth noting), the historical relationship between these parties dating back to 2014 suggests operational stability. Target's positioning for additional government-related opportunities could further leverage their modular infrastructure expertise across similar contracts.
This contract structure reflects sophisticated government contracting strategy by Target Hospitality. The arrangement—flowing from ICE through an intergovernmental services agreement (IGSA) with Dilley, Texas, then to CoreCivic and finally to Target—follows established protocols for federal immigration facility operations.
The maintained capacity of 2,400 individuals and similar operational scope indicates continuity with previous operations, minimizing transition risks and regulatory complications. The seamless reactivation demonstrates Target's specialized capabilities in rapidly scaling facilities to meet federal requirements—a competitive advantage when pursuing similar opportunities.
While the contract includes standard government appropriation dependencies and cancellation provisions, the fixed minimum revenue component provides unusual protection for a government contractor. Most federal contracts lack such guarantees, making this structure particularly advantageous in an environment where immigration policies and facility requirements can shift.
The timing suggests alignment with current administration priorities on immigration processing capacity. Target's explicit mention of "continuing evaluating additional growth opportunities supporting the U.S. government's immigration policies" indicates management is strategically positioning for potential expansion in this sector, leveraging their demonstrated expertise in facility management for immigration-related needs.
This contract reestablishes Target's footprint in a specialized market segment where barriers to entry remain high due to operational complexities and compliance requirements—creating defensible competitive positioning.
These assets operated from September 2014 to August 2024 as the South Texas Family Residential Center ("Dilley Facility"), where Target provided facility and hospitality solutions to CoreCivic through a lease and services agreement. Upon reactivation the Dilley Facility will retain a similar facility size and operational scope as the prior operations.
The Dilley Facility will be capable of supporting up to 2,400 individuals and provide an open and safe environment to appropriately care for the community population. The consistency of the community layout will require no capital investment, allowing for a seamless community reactivation.
Target will provide facility and hospitality solutions to CoreCivic under the Dilley Contract, which has a similar economic structure to the Company's previous agreement with CoreCivic, including fixed minimum revenue regardless of occupancy. The Dilley Contract is expected to provide over
The seamless reactivation of this community illustrates the benefits of Target's flexible operating model and unique capabilities. These elements consistently support the Company's ability to appropriately respond to customer demand, while providing unmatched customized solutions. Target believes these distinct core competencies form a strong foundation as the Company continues evaluating additional growth opportunities supporting the
"We are excited to continue our partnership with CoreCivic, leveraging the unique strengths of both organizations to support the
The Dilley Contract is supported by an amended intergovernmental services agreement ("IGSA") between the city of
About Target Hospitality
Target Hospitality is one of
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Certain statements made in this press release (including the financial outlook contained herein) are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: operational, economic, including inflation, political and regulatory risks; our ability to effectively compete in the specialty rental accommodations and hospitality services industry, including growing the HFS – South and Government segments; effective management of our communities; natural disasters and other business disruptions, including outbreaks of epidemic or pandemic disease; the duration of any future public health crisis, related economic repercussions and the resulting negative impact to global economic demand; the effect of changes in state building codes on marketing our buildings; changes in demand within a number of key industry end-markets and geographic regions; changes in end-market demand requirements that could lead to cancelation of contracts for convenience in the Government segment; our reliance on third party manufacturers and suppliers; failure to retain key personnel; increases in raw material and labor costs; the effect of impairment charges on our operating results; our future operating results fluctuating, failing to match performance or to meet expectations; our exposure to various possible claims and the potential inadequacy of our insurance; unanticipated changes in our tax obligations; our obligations under various laws and regulations; the effect of litigation, judgments, orders, regulatory or customer bankruptcy proceedings on our business; our ability to successfully acquire and integrate new operations; global or local economic and political movements, including any changes in policy under the Trump administration or any future administration; federal government budgeting and appropriations; our ability to effectively manage our credit risk, liquidity and collect on our accounts receivable; our ability to fulfill Target Hospitality's public company obligations; any failure of our management information systems; our ability to refinance debt on favorable terms and meet our debt service requirements and obligations; and risks related to our outstanding debt obligations. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Investor Contact
Mark Schuck
(832) 702 – 8009
ir@targethospitality.com
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SOURCE Target Hospitality
FAQ
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